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2013 (10) TMI 749 - AT - Income TaxNature of receipts, whether a capital receipt or revenue receipt - Assessee-company had purchased on slump-sale basis the Non-Synthetic Pyrethroid division (NSP) of the Mitsu Industries Ltd. Simultaneously, a development took place according to which M/s. Hoechst Schering AgrEvo, a foreign company, acquired controlling interest of Mitsu Industries Ltd. vide JV Agreement dated 03/07/1999 – Held that:- Once a division has been siphoned out by Mitsu Industries Ltd. which was purchased as a slump sale by the assessee, then why a non-compete fees was paid to the assessee – In the present case, there was no transfer of any trade-mark or any asset for which the assessee in question has received any consideration. There was no agreement between the assessee and the Hoechst AgrEvo. Most importantly, there was no restrictive covenant for not carrying on the business of manufacturing of Pesticides by the assessee - In the absence of any loss of income on account of existence of a restrictive covenant, there was total absence of holding the receipt in question as capital receipt. TDS on the gift made by the assessee – Held that:- Value of articles distributed by the assessee to its employees comes within the ambit of ‘perquisites’ employed in Section 17(2)(iii)© of the IT Act which is covered under the definition of ‘Salaries’ as provided in Section 17(i)(iv) of the Act. Therefore, before distributing articles to the employees, the assessee ought to have deducted the tax at source on the value of such articles - Ld.Assessing Officer has rightly charged the interest u/s.201(1A) of the Act – Decided against the Assessee. Allowability of foreign travel expense – Commissioner (A) deleted addition on account of foreign travel expenses amounting to Rs.1,81,130/- - Expenditure towards foreign travel was for the purpose of the assessee’s business - Various Executives are necessarily required to travel to abroad to study the market and development of the market - Assessee is having export business and requires it employees to go abroad – Deduction of foreign travel expense allowed – Decided in favor of assessee.
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